To All:
Jay Taylor is not suggesting to sell Naxos and buy the other lowly priced
dirts because of Naxos, but rather of what the gold market is doing.
He assumes that it is a good time to invest in these lowly priced stocks
because when gold prices will turn up, your return would be (arguably)
much better.
It is here that he errs. There is no guarantee that the gold prices will
turn up substantially any time soon.
What does it mean for Naxos? We don't really know yet.
The depressed gold prices is bad news for the high-cost mines. We will
see lots of mine closings if the prices do not turn up.
The "winners" will be those mines that can operate at very low costs.
Presumably, Naxos will be able to do so.
IPM has good but ordinary results, not that of a scam. However, these
results do not give a great deal of encouragement to invest in a new
mine when there are ample (soon idled) mines around, UNLESS they can
extract the gold very cheaply.
Naxos has two things going for it (this is of course contingent on a
reconfirmation or near-confirmation of the non-COC results): first,
higher than usual levels of gold, which will drive than operating costs,
and second, potentially recoverable platinum, which has a far more
balanced market to go to. A low cost mine will likely have more of
a future in a gold market with depressed prices than many of the high-
cost ones. The platinum is just a bonus.
What may be interesting to know and perhaps Kim B. can elaborate on this
can Naxos actually develop Franklin economically purely on the platinum
present? Then the gold would be the icing.
Mind you, there is an awful lot of gold around the world. Even if current
production would falter tremendously, there is enough in the Fort Knoxes
of the world to take care of demand for many years.
Anyhow, this is may humble opinion.
Jan |
